With a stronger mandate and unfinished business from their first term, will the newly re-elected Albanese Government push forward with an aggressive industrial relations agenda? Here are the key proposals to watch.
Following a historic win in the recent Federal election, Anthony Albanese and the Australian Labor Party (ALP) have commenced their second term in government. Alongside Labor’s win, Australia will also see a new dynamic in the Senate with the Greens holding the sole balance of power.
No formal action plan has been set, and the ALP’s campaign was relatively light on in terms of industrial relations commitments. However, with an unquestionable mandate to govern, it remains to be seen whether the Albanese Government, with support of the Greens, will seek to revisit some of their proposals that didn’t quite make it through in the first term, or to prioritise some of the lesser publicised aspects of their industrial relations platforms.
Proposals to watch:
- A ban on non-compete clauses for workers earning less than $175,000 (the high-income threshold).
- A potential ban on wage fixing and the use of ‘no-poach’ agreements to block employees from being hired by competitors.
- Legislation preventing the Fair Work Commission from removing penalty rates.
- Wage increases for aged care workers and early childhood educators.
- The possibility of a portable entitlements scheme for disability support workers to carry through annual, sick and long service leave.
Ban on non-compete clauses
The government has committed to introducing a ban on non-compete clauses for workers earning less than the high-income threshold, which is currently $175,000/year (indexed annually). These reforms are stated to take effect from 2027.
The Government’s Competition Review suggested that more than three million Australian workers are covered by non-compete clauses including childcare workers, construction workers and hairdressers. The review found that non-compete clauses were being used indiscriminately across income levels and occupations.
The detail of the proposal remains to be seen, including whether the proposal might impact on non-compete obligations in other contexts, such as in the sale of a business.
At this stage the government has not committed to making any changes to non-solicitation clauses, which are significantly more enforceable even against lower income earners. However, the government intends to conduct further consultation on their applicability.
To prepare for these changes, if not already, employers should be separating their non-compete and non-solicitation obligations in their employment contracts and considering whether non-compete obligations are necessary for more junior employees.
Employers can also consider implementing retention incentives for employees with access to commercially sensitive information or direct access to clients who earn below the high-income threshold to persuade them from resigning to join a competitor.
Penalty rates and wage regulation
The former Employment and Workplace Relations Minister, Senator Murray Watt committed to legislating to protect penalty rates in awards.
This legislation may have unintended consequences if it restricts the ability of employers to pay annualised salaries or all-in rates of pay that leave employees better off overall than if they had been paid specific penalty rates.
Annual salaries are a helpful tool used by many employers to simplify compliance with modern awards while ensuring that employees are better off overall.
Other ALP policies
With its historic victory, the Labor party may take this opportunity to implement policies that it didn’t take to the election. The ALP’s 2023 National Platform gives us some ideas about the ALP’s less-publicised priorities.
While the commitments made in the ALP’s national platform lack detail, they provide insight in relation to the party’s priorities, and will be relevant in considering the government’s legislative agenda for its second term. Some of the more specific policies referenced in the 2023 National Platform include:
- working with state and territory governments to achieve a national minimum standard for long service leave to form part of the National Employment Standards (as opposed to the current State-based approach);
- consulting with state and territory governments, employers and unions to facilitate and establish the portability of entitlements including through industry-wide schemes;
- reviewing the operation of the National Employment Standards and clarifying any questions relating to the applications of those standards;
- strengthening laws that prohibit sham contracting;
- setting an objective test in legislation for determining when a worker is casual;
- establishing a national labour hire licensing scheme to regulate the labour hire industry and ensure that minimum legal standards are met;
- considering amending the Corporations Law to strengthen the recovery of employee entitlements, including safe harbour provisions which allow companies to continue to trade while potentially or actually insolvent.
Greens holding sole balance of power
With the Greens holding the sole balance of power in the Senate, we are expecting to see progressive industrial relations policies considered. Amongst the Greens’ ambitious 60-point industrial relations proposal, the Greens want to see a minimum wage of no less than 60% of the median Australian full-time wage, penalty rates awarded for all work in excess of contracted hours and a transition toward the four day work week with no reduction in pay.
The Albanese Government has expressed an openness to exploring test cases on the four-day work week but is yet to formally commit to the Green’s proposal.
Further Greens’ policies we may see in the spotlight include:
- a legislated minimum of five weeks annual leave for all employees;
- an enhanced national paid parental leave scheme with a minimum shared total leave period;
- an enforceable right to disconnect from work outside of contracted hours;
- reform of workplace laws and the portability of leave entitlements to reflect the growth in insecure employment and the fact that people are more likely to work for multiple employers during their working lives; and
- expanded penalties for labour hire companies that engage in and facilitate repeated or systemic violations of the law.
For more information on how to prepare for the changes, please contact Timothy Zahara.
